FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1999
______________
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _______________ to _________________________
Commission File Number: 0-18133
IDS/JONES GROWTH PARTNERS II, L.P.
______________________________________________________________________________
Exact name of registrant as specified in charter
Colorado #84-1060548
______________________________________________________________________________
State of organization I.R.S. employer I.D. #
1500 Market Street, Philadelphia, PA 19102-2148
_______________________________________________
Address of principal executive office
(215) 665-1700
______________
Registrant's telephone number
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
IDS/JONES GROWTH PARTNERS II, L.P.
(A Limited Partnership)
UNAUDITED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
ASSETS 1999 1998
------ ---------- -------------
Proceeds from sale in escrow $ 3,332,752 $ 3,283,500
----------- -----------
Total assets $ 3,332,752 $ 3,283,500
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
LIABILITIES:
Accounts payable and accrued liabilities $ 1,985,270 $ 1,587,562
----------- -----------
Total liabilities 1,985,270 1,587,562
----------- -----------
MINORITY INTEREST IN JOINT VENTURE 463,362 583,231
----------- -----------
PARTNERS' CAPITAL:
General Partners-
Contributed capital 500 500
Accumulated deficit (500) (500)
----------- -----------
- -
----------- -----------
Limited Partners-
Net contributed capital (174,343 units outstanding at
March 31, 1999 and December 31, 1998) 37,256,546 37,256,546
Distributions (33,678,970) (33,678,970)
Accumulated deficit (2,693,456) (2,464,869)
----------- -----------
884,120 1,112,707
----------- -----------
Total liabilities and partners' capital $ 3,332,752 $ 3,283,500
=========== ===========
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated balance sheets.
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IDS/JONES GROWTH PARTNERS II, L.P.
(A Limited Partnership)
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended
March 31,
--------------------------------
1999 1998
---------- -----------
REVENUES $ - $ 5,137,941
COSTS AND EXPENSES:
Operating expenses - 2,779,999
Management and supervision fees and allocated
overhead from General Partners - 577,439
Depreciation and amortization - 1,945,088
---------- -----------
OPERATING LOSS - (164,585)
---------- -----------
OTHER INCOME (EXPENSE):
Interest expense - (945,163)
Other, net (348,456) (2,756)
---------- -----------
Total other income (expense), net (348,456) (947,919)
---------- -----------
CONSOLIDATED LOSS (348,456) (1,112,504)
MINORITY INTEREST IN CONSOLIDATED LOSS 119,869 382,701
---------- -----------
NET LOSS $(228,587) $ (729,803)
========== ===========
ALLOCATION OF NET LOSS:
General Partners $ - $ (7,298)
========== ===========
Limited Partners $(228,587) $ (722,505)
========== ===========
NET LOSS PER LIMITED PARTNERSHIP UNIT $ (1.31) $ (4.14)
========== ===========
WEIGHTED AVERAGE NUMBER OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 174,343 174,343
========== ===========
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated statements.
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IDS/JONES GROWTH PARTNERS II, L.P.
(A Limited Partnership)
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended
March 31,
--------------------------------
1999 1998
----------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(228,587) $ (729,803)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization - 1,945,088
Minority interest in consolidated loss (119,869) (382,701)
Decrease in trade receivables - 174,004
Increase in proceeds from sale in escrow (49,252) -
Increase in deposits, prepaid expenses and deferred charges - (27,932)
Increase in accounts payable, accrued liabilities and subscriber
prepayments 397,708 78,367
Decrease in advances from Managing General Partner - (13,353)
--------- -----------
Net cash provided by operating activities - 1,043,670
--------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net - (1,020,052)
--------- -----------
Net cash used in investing activities - (1,020,052)
--------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt - (7,196)
--------- -----------
Net cash used in financing activities - (7,196)
--------- -----------
Increase in cash - 16,422
Cash, beginning of period - 124,766
--------- -----------
Cash, end of period $ - $ 141,188
========= ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid $ - $ 893,515
========= ===========
The accompanying notes to unaudited consolidated financial statements
are an integral part of these unaudited consolidated statements.
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IDS/JONES GROWTH PARTNERS II, L.P.
(A Limited Partnership)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) This Form 10-Q is being filed in conformity with the SEC requirements
for unaudited financial statements and does not contain all of the necessary
footnote disclosures required for a complete presentation of the Balance Sheets
and Statements of Operations and Cash Flows in conformity with generally
accepted accounting principles. However, in the opinion of management, this data
includes all adjustments, consisting only of normal recurring accruals,
necessary to present fairly the financial position of IDS/Jones Growth Partners
II, L.P. (the "Partnership") at March 31, 1999 and December 31, 1998 and its
Statements of Operations and Cash Flows for the three month periods ended
March 31, 1999 and 1998.
The accompanying financial statements include 100 percent of the
accounts of the Partnership and those of IDS/Jones Joint Venture Partners (the
"Venture"), including the cable television system serving the communities of
Aurora, North Aurora, Montgomery, Plano, Oswego, Sandwich, Yorkville and certain
unincorporated areas of Kendall and Kane Counties, all in the State of Illinois
(the "Aurora System"), reduced by the 34.4 percent minority interests in the
Venture. All interpartnership accounts and transactions have been eliminated. As
discussed below, the Venture sold the Aurora System on December 4, 1998. Jones
Cable Corporation, a Colorado corporation, is the "Managing General Partner."
On April 7, 1999, Comcast Corporation ("Comcast") completed the
acquisition of a controlling interest in Jones Intercable, Inc. ("Intercable").
Comcast now owns approximately 12.8 million shares of Intercable's Class A
Common Stock and approximately 2.9 million shares of Intercable's Common Stock,
representing approximately 37% of the economic interest and 47% of the voting
interest in Intercable. Also on that date, Comcast contributed its shares in
Intercable to Comcast's wholly owned subsidiary, Comcast Cable Communications,
Inc. ("Comcast Cable"). The approximately 2.9 million shares of Common Stock of
Intercable owned by Comcast represents approximately 57% of the outstanding
Common Stock, which class of stock is entitled to elect 75% of the Board of
Directors of Intercable. As a result of this transaction, Intercable is now a
consolidated public company subsidiary of Comcast Cable.
Also on April 7, 1999, the bylaws of Intercable were amended to
establish the size of Intercable's Board of Directors as a range from eight to
thirteen directors and the board was reconstituted so as to have eight directors
and the following directors of Intercable resigned: Robert E. Cole, Josef J.
Fridman, James J. Krejci, James B. O'Brien, Raphael M. Solot, Robert Kearney,
Howard O. Thrall, Siim Vanaselja, Sanford Zisman and Glenn R. Jones. In
addition, Donald L. Jacobs resigned as a director elected by the holders of
Class A Common Stock and was elected by the remaining directors as a director
elected by the holders of Common Stock. The remaining directors elected the
following persons to fill the vacancies on the board created by such
resignations: Ralph J. Roberts, Brian L. Roberts, John R. Alchin, Stanley Wang
and Lawrence S. Smith. All of the newly elected directors, with the exception of
Mr. Jacobs, are officers of Comcast. Also on April 7, 1999, the following
executive officers of Intercable resigned: Glenn R. Jones, James B. O'Brien,
Ruth E. Warren, Kevin P. Coyle, Cynthia A. Winning, Elizabeth M. Steele, Wayne
H. Davis and Larry W. Kaschinske. The following persons were appointed as
executive officers of Intercable on April 7, 1999: Ralph J. Roberts, Brian L.
Roberts, Lawrence S. Smith, John R. Alchin and Stanley Wang.
Comcast is principally engaged in the development, management and
operation of broadband cable networks and in the provision of content through
programming investments. Comcast Cable is principally engaged in the
development, management and operation of broadband cable networks. The address
of Comcast's principal office is 1500 Market Street, Philadelphia, Pennsylvania
19102-2148, which is also now the address of the principal office of Intercable
and of the Managing General Partner. The address of Comcast Cable's principal
office is 1201 Market Street, Suite 2201, Wilmington, Delaware 19801.
(2) On December 4, 1998, the Venture sold the Aurora System, its only
operating asset, to an unaffiliated party for a sales price of $108,500,000. The
Venture repaid all of its indebtedness, settled working capital adjustments,
deposited $3,283,500 into an interest-bearing indemnity escrow account and
distributed the remaining net sales proceeds of $51,374,610 to its four
partners. The Partnership received $33,678,970, or 65.6 percent, of the
$51,374,610 distribution. The Partnership in turn distributed these funds to its
limited partners.
The $3,283,500 of the sale proceeds placed in the indemnity escrow
account will remain in escrow until November 15, 1999 as security for the
Venture's agreement to indemnify the buyer under the asset purchase agreement.
The
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Venture's primary exposure, if any, will relate to the representations and
warranties made about the Aurora System in the asset purchase agreement. Any
amounts remaining from this interest-bearing indemnity escrow account and not
claimed by the buyer at the end of the escrow period, plus interest earned on
escrowed funds, will be returned to the Venture. From this amount, the Venture
will pay its remaining liabilities, which totaled $1,985,270 at March 31, 1999,
and then the Venture will distribute the remaining balance to its four partners.
The Partnership and the Venture will continue in existence at least until any
amounts remaining from the interest-bearing indemnity escrow account have been
distributed. Since the Aurora System represented the only asset of the
Partnership and the Venture, the Partnership and the Venture will be liquidated
and dissolved upon the final distribution of any amounts remaining from the
interest-bearing indemnity escrow account, most likely in the fourth quarter of
1999. If any disputes with respect to the indemnification arise, the Partnership
and the Venture would not be dissolved until such disputes were resolved, which
could result in the Partnership and the Venture continuing in existence beyond
1999.
(3) The Managing General Partner manages the Partnership and the Venture
and received a fee for its services equal to 5 percent of the gross revenues of
the Aurora System until its sale on December 4, 1998, excluding revenues from
the sale of cable television systems or franchises. Management fees paid to the
Managing General Partner for the three month periods ended March 31, 1999 and
1998 were $-0- and $256,897, respectively. The Managing General Partner has not
received and will not receive a management fee after December 4, 1998.
IDS Cable II Corporation (the "Supervising General Partner") and IDS
Cable Corporation (the supervising general partner of IDS/Jones Growth Partners
89-B, Ltd.) participated in certain management decisions of the Venture and
received a fee for their services equal to 1/2 percent of the gross revenues of
the Aurora System, excluding revenues from the sale of cable television systems
or franchises. Supervision fees for the three month periods ended March 31, 1999
and 1998 were $-0- and $25,690, respectively. The Supervising General Partner
and IDS Cable Corporation have not received and will not receive a supervision
fee after December 4, 1998.
The Venture will continue to reimburse Intercable, the parent of the
Managing General Partner, for certain administrative expenses. These expenses
represent the salaries and related benefits paid for corporate personnel. Such
personnel provide administrative, accounting, tax, legal and investor relations
services to the Venture. Such services, and their related costs, are necessary
to the administration of the Venture. Reimbursements made to Intercable by the
Venture for overhead and administrative expenses during the three month periods
ended March 31, 1999 and 1998 were $5,114 and $294,852, respectively.
The Supervising General Partner and IDS Cable Corporation may also be
reimbursed for certain expenses incurred on behalf of the Venture. There were no
reimbursements made to the Supervising General Partner or IDS Cable Corporation
for overhead and administrative expenses during the three month periods ended
March 31, 1999 and 1998.
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IDS/JONES GROWTH PARTNERS II, L.P.
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Partnership owns a 65.6 percent interest in the Venture. The
accompanying financial statements include the accounts of the Partnership and
the Venture, reduced by the 34.4 percent minority interests in the Venture. The
Venture owned the Aurora System until its sale on December 4, 1998.
On December 4, 1998, the Venture sold the Aurora System, its only
operating asset, to an unaffiliated party for a sales price of $108,500,000. The
Venture repaid all of its indebtedness, settled working capital adjustments,
deposited $3,283,500 into an interest-bearing indemnity escrow account and
distributed the remaining net sales proceeds of $51,374,610 to its four
partners. The Partnership received $33,678,970, or 65.6 percent, of the
$51,374,610 distribution. The Partnership in turn distributed these funds to its
limited partners.
The $3,283,500 of the sale proceeds placed in the indemnity escrow
account will remain in escrow until November 15, 1999 as security for the
Venture's agreement to indemnify the buyer under the asset purchase agreement.
The Venture's primary exposure, if any, will relate to the representations and
warranties made about the Aurora System in the asset purchase agreement. Any
amounts remaining from this interest-bearing indemnity escrow account and not
claimed by the buyer at the end of the escrow period, plus interest earned on
escrowed funds, will be returned to the Venture. From this amount, the Venture
will pay its remaining liabilities, which totaled $1,985,270 at March 31, 1999,
and then the Venture will distribute the remaining balance to its four partners.
The Partnership and the Venture will continue in existence at least until any
amounts remaining from the interest-bearing indemnity escrow account have been
distributed. Since the Aurora System represented the only asset of the
Partnership and the Venture, the Partnership and the Venture will be liquidated
and dissolved upon the final distribution of any amounts remaining from the
interest-bearing indemnity escrow account, most likely in the fourth quarter of
1999. If any disputes with respect to the indemnification arise, the Partnership
and the Venture would not be dissolved until such disputes were resolved, which
could result in the Partnership and the Venture continuing in existence beyond
1999.
RESULTS OF OPERATIONS
The Venture sold its Aurora System on December 4, 1998 and ceased
operations as of such date. Because the Aurora System was the Venture's only
operating asset, a discussion of results of operations would not be meaningful.
Other expenses of $348,456 incurred in the first quarter of 1999 related to
various costs associated with the sale of the Venture's Aurora System. The
Venture and the Partnership will be liquidated and dissolved upon the final
distribution of any amounts remaining from the interest-bearing indemnity escrow
account referred to above, most likely in the fourth quarter of 1999.
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PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
27) Financial Data Schedule
b) Reports on Form 8-K
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IDS/JONES GROWTH PARTNERS II, L.P.
BY: JONES CABLE CORPORATION
its Managing General Partner
By: /S/ Lawrence S. Smith
-------------------------------------
Lawrence S. Smith
Principal Accounting Officer
By: /S/ Joseph J. Euteneuer
-------------------------------------
Joseph J. Euteneuer
Vice President (Authorized Officer)
Dated: May 14, 1999
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